Tuesday, January 20, 2015

My
theory of investing evolves around simplicity and that is because I found that
my clients would get lost in the weeds of research before they could make a
decision on which stock to buy.In some
ways, that was good news for me because if they could have done the research
themselves they would not have needed an adviser.

Measuring
how my stock picking criteria performed needed to be easy as well.Easy for me to track and easy for you to
understand.This lead to my using the
model portfolios as a way to measure how well the stocks I picked, using very
limited criteria, performed.

Nothing
is perfect and I picked some bummers, but over all, this simple technique has
worked well as you can see by looking at the model portfolios.If you are not familiar with my stock picking
criteria, please see the Dividend Machine Criteria page.

Money
to Invest from Covered Calls

This
last week was call expiration for January.Several of my calls were assigned.That means that whoever bought my calls, also bought the stock.I never understand call buyers, I am just happy
they exist. Most call options expire.But this week several were taken.

For
instance, I had calls on Intel, symbol INTC, at $36.INTC closed at $36.45 and the call buyer
exercised their right to buy INTC from me at $36.Right now this buyer is just breaking even
and is either covering a short position and had to buy it, or is counting on
INTC going up over time.

INTC’s
yield is bit weak for me at 2.49%.Plus, INTC has not increased the dividend in 10 quarters.I decided to put that money to work in a stock
with a higher yield and better dividend growth.

Southern
Companies (SO) Dividend Machine Fundamentals

Today,
I am profiling a utility company, Southern Companies, symbol SO.Utilities tend to perform like bonds and so
are kind of expensive now.But, I have
never used stock price as one of the criteria I use to pick a stock.Moreover, I have never used, factors such as
what sectors are expensive or which are cheap to determine which stock to buy
at a given time.

Southern
Companies is a very good utility.It
pays 4.09% based on Friday’s closing price of $51.35.Dividend increases have averaged 4% per year
for the past 5 years.D/E Ratio is 1.09
which is within industry standards.

See
the table below to review SO’s Dividend Machine Fundamentals.

Consider
SO as one of the stocks you use for income.

TheMoneyMadam

I
want to remind you that I will use the closing price on Tuesday as the basis
for tracking SO performance in the 2015 Dividend Machine Portfolio.I do this when I profile a company before or
after market hours.When I profile a
company during intraday trading, I will use the price the stock trades at when
profiled.

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Covered Call Opportunities

Square, symbol SQ, is my current favorite stock that is not a dividend machine. To turn it into an income investment, I use SQ's volatiity to buy when it dips and sell calls. See the table above. Note that this call is not included in the post published on 12/12/18 M*

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TheMoneyMadam's Story

My income investing success came from my experience managing my and other people's money since 1993. Successful income investing requires discipline. In this blog I provide specific investments based on my principles of conservative income investing. I hope to help the thousands or even millions of people who have saved and want to invest their nest eggs to retire with income that grows. M* MoneyMadam

Disclaimer

Information on this blog does not constitute investment advice. Review or mention of any stock, bond, or other investment shall not be considered a buy or sell recommendation. Everything in this blog is the opinion of the author and no warranties are expressed or implied. M*MoneyMadam.